Compared to the mean grant, grants to declining urban areas are significantly less cost-effective, whereas grants to the generally rural counties where many people go fishing or swimming are significantly more effective. We deflate operating and maintenance costs and rents at a rate of 7.85% (Peiser and Smith 1985).23, Column (1) of TableVI includes only owned homes within a 1-mile radius of the downstream river segments; column (2) includes homes within a 25-mile radius; and column (3) adds rental units. The CWA made it unlawful to discharge any pollutant from a point source into navigable waters, unless a permit was obtained: National Pollutant Discharge Elimination System (NPDES), EPA History: Federal Water Pollution Control Act Amendments of 1972, The official text of the CWA continues to be available in. After 1990, the trends approach zero. For the few governments that do not report when their fiscal year ends, we assume they report by calendar year. Data cover decennial census years 19702000. Some nutrients like ammonia and phosphorus are declining, while others like nitrates are unchanged. The statistic we use reflects the binary cutoff of whether a majority of readings are fishable. The gradual effect of the grants is unsurprising since, as mentioned earlier, the EPA estimates that it took 2 to 10 years after a grant was received for construction to finish. We emphasize a few caveats in interpreting TableIV. Panel B includes the local copayment, and finds pass-through rates of 0.84 to 0.93 in real terms or 1.09 in nominal terms. If you experience a problem reading a document with assistive technology, please contact us. Engineering calculations in USEPA (2000c) suggest that the efficiency with which treatment plants removed pollution grew faster in the 1960s than in the 1980s or 1990s. We also report a range of sensitivity analyses, which are broadly in line with the main results. That study does not separately identify the effect of the pollution tax from the effect of the abatement subsidy. We also explored estimates controlling for city-year population or city-year municipal revenue. Water is one of the resources on the Earth that is becoming more and more scarce and the . Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. It is possible that areas with more pollution data may be of greater interest; for example, FigureI, Panel C shows more monitoring sites in more populated areas. This article assembles an array of new data to assess water pollutions trends, causes, and welfare consequences. Most analyses of recent U.S. water quality regulation count little direct benefit from improving human health (Lyon and Farrow 1995; Freeman 2000; USEPA 2000a; Olmstead 2010).29. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly . One such channel involves substitutioncleaning up part of a river in an area with many dirty rivers might have different value than cleaning up a river in an area with many clean rivers. Objective versus Subjective Assessments of Environmental Quality of Standing and Running Waters in a Large City, 1967 Census of Manufactures: Water Use in Manufacturing, National Water Quality Inventory. Adding population or city revenue controls to the specification of column (4) in TableIV gives estimates of 1.22 (0.30) or 0.91 (0.18) for Panel A, and 0.92 (0.22) or 0.68 (0.13) for Panel B. Online Appendix FigureVI shows national trends in federal versus state and local spending on wastewater treatment capital over 19601983.21 State and local spending on wastewater treatment capital declined steadily from a total of |${\$}$|43 billion in 1963 to |${\$}$|22 billion in 1971 and then to |${\$}$|7 billion annually by the late 1970s. Current policy debates center on the uncertainty around wetland benefits. For water pollution, however, people can more easily substitute between nearby clean and dirty rivers for recreation. \end{equation}. We considered a fourth repository, the Sustaining the Earths Watersheds: Agricultural Research Data System (STEWARDS), managed by the USDA. Online Appendix E.2 discusses how cost-effectiveness numbers change with alternative estimates of crowding out.22. A fourth question involves health. Finally, we interpret our pass-through estimates cautiously because they reflect only 198 cities, do not use upstream waters as a comparison group, and reflect pass-through of marginal changes in investment, rather than the entire Clean Water Act. Column (3) adds river basin year fixed effects. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). "Clean Water Act" became the Act's common name with amendments in 1972. Each observation in a regression is a plant-downstream-year tuple. The Clean Water Act (CWA) establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters. Implemented in response to growing public awareness and concern for controlling water pollution in the U.S., the Clean Water Act followed the establishment of the Environmental Protection Agency (EPA) and the passage of the Clean Air Act in 1970, and preceded the Endangered Species Act of 1973, making it part of a period of landmark . $4.2 Billion Environmental Bond Act: What you should know The bid function is the consumers indifference curve in the trade-off between the price of a home and the amount of attribute j embodied in the home. 2001; Jeon etal. Diving Into the Benefits of the Clean Water Act Notes. Misperception would be less important if most benefits of surface water quality accrue through recreation or aesthetics, since failing to perceive water pollution through any means would mean its effects on recreational demand are limited. In Panel B, the year variables are recentered around 1972. Parts of the Clean Air Act use cap-and-trade systems, but nearly none of the Clean Water Act does. If approved, it will protect clean drinking water, upgrade water infrastructure, preserve open space and family farms, fight climate change, and keep communities safe from extreme weather,. The Dirty 31: Is Your State Arguing Against Clean Water? The graphs show no obvious evidence of a mean shift or trend break in water pollution around 1972. We also observe that each additional grant results in further decreases in pollution (Online Appendix TableVI), which would be a complicated story for the timing of government human capital to explain. In years before a grant, the coefficients are statistically indistinguishable from zero, have modest magnitude, and have no clear trend (FigureIII). Column (4) implies that each grant increases mean home values within 25 miles of affected waters by 0.024 percentage point. Our recreation data also represent all trips, and water-based recreation trips might require different travel distances. For this reason, our preferred methodology in Section IV.B to assess how Clean Water Act grants affect water pollution uses a triple-difference estimator comparing upstream and downstream areas. saturation increase/10, 7. A third question involves substitution. 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